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Concern That Housing Rebound Could Be 'fizzling Out'

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The auction price index showed that more than 40 per cent of properties sold at auction in July went for a discount of between 10 per cent and 40 per cent. This was a big increase in the dispersion of prices, after about 25 per cent were sold for 10 to 20 per cent discounts in June, and may point to increasing uncertainty about the right value for purchases.

“It suggests investors are getting a bit wary,†said Mr Brigden.

Or perhaps some of them have spent what they wanted to.

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(FT print edition headline) Concern that housing rebound could be 'fizzling out'

I almost choked on my coffee this morning as I read this in the paper, such was my concern for the bulls and speculators who might have overextended themselves into this classic investment trap.

Groan, I can feel the weight of the Right Man's Burden already ;)

Edited by drrayjo

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There are also suspicions that a shortage of supply is supporting prices and giving a false picture of the market.

The accidental landlords are shooting themselves in the foot.

In the short run, their actions are helping to prop up prices. In the long run, they are going to increase supply.

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The median discount on houses sold at auction compared with their value in the conventional market rose to 18 per cent in July from 13 per cent in June and 11 per cent in May, research published on Friday shows.

I'd not seen this metric published before; I like the cut of its jib!

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The second consecutive month of increasing discounts on auction properties could point to a further downturn in house prices.

“The widening of the auction discount over the past two months is perhaps the first indication that the nascent housing rebound is already fizzling out.â€

The auction price index showed that more than 40 per cent of properties sold at auction in July went for a discount of between 10 per cent and 40 per cent

While interest rates have yet to rise and unemployment is some distance from its peak. This has led many economists to expect house prices to resume their decline.

In my opinion once the small amount of money that was was waiting for "THE BOTTOM" or what they thought was the bottom has been spent we are back to a situation where the majority of people need mortgages to buy.

3X earnings mortgages are what banks should give to people so further drops are inevitable. The alternative is that we completely destroy are nations economy by loaning to people who cannot afford to pay or dont ever intend to repay their mortgages and have our credit rating downgraded as a nation.

That would be a great insult to our nation & would make borrowing costs much higher in the process.

What i see happening on the ground is a flood of property has come onto the market in JULY and only the very best or heavily discounted property is selling.

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(FT print edition headline) Concern that housing rebound could be 'fizzling out'

I almost choked on my coffee this morning as I read this in the paper, such was my concern for the bulls and speculators who might have overextended themselves into this classic investment trap.

I must confess to being quite concerned that this could be the BIGGEST cause of death for HPCrashers I wouldn't like to say how many times a week I read "I almost choked on my coffee". Makes you wonder how many DO choke on their coffee /breakfast/ lunch but haven't got time to post to tell us they have!! Mind you we have all had so much practice in swallowing things that are hard to swallow this summer perhaps this was in preparation for the increasing bearish news ;)

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I must confess to being quite concerned that this could be the BIGGEST cause of death for HPCrashers I wouldn't like to say how many times a week I read "I almost choked on my coffee". Makes you wonder how many DO choke on their coffee /breakfast/ lunch but haven't got time to post to tell us they have...

How many fatalities? Difficult to reply when you are dead! :o

Come to think of it, there are a few posters I haven't seen here for a while :unsure:

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I must confess to being quite concerned that this could be the BIGGEST cause of death for HPCrashers I wouldn't like to say how many times a week I read "I almost choked on my coffee". Makes you wonder how many DO choke on their coffee /breakfast/ lunch but haven't got time to post to tell us they have!! Mind you we have all had so much practice in swallowing things that are hard to swallow this summer perhaps this was in preparation for the increasing bearish news ;)

Bring on the honey - I'm in position, funnel gaffa-taped to my mouth.

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How many fatalities? Difficult to reply when you are dead! :o

Come to think of it, there are a few posters I haven't seen here for a while :unsure:

Yes but they were probably down at the IMF with Bloo Loo buying bathroom cabinets......

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Sensible article, but

There are also suspicions that a shortage of supply is supporting prices and giving a false picture of the market.

seems badly worded!

The market price is determined by supply and demand at that instant in time. The reluctance of owners to sell reduces supply and ups the price, but that isn't a "false" picture - it is just the picture. If the owners suddenly change their minds and put their houses on the market supply will increase and the price will fall.

What I assume he means is that he thinks in the future supply will increase, and prices will fall, in which case he should just say that and present it as what it is, opinion.

Instead he is using weasel words and unattributed quotes " there has been widespread surprise ", "There are also suspicions "...

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The median discount on houses sold at auction compared with their value in the conventional market rose to 18 per cent in July from 13 per cent in June and 11 per cent in May, research published on Friday shows.

Unfortunately most of the public will remain unaware of property selling for less now at auctions, due to the fact most of these sales (or all?), are discounted in the official Halifax/Nationwide statistics, thus fuelling the media hype that house prices are still going up in general. :rolleyes:

I do wonder if repossession sales were actually included in the official figures, whether we would still be seeing figures showing an increase in property prices over the last few months?

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